The World Bank Social Safety Net Project (P149323) REPORT NO.: RES33758 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SOCIAL SAFETY NET PROJECT APPROVED ON SEPTEMBER 16, 2015 TO MINISTRY OF ECONOMY AND PLANNING REPUBLIC OF MADAGASCAR SOCIAL PROTECTION & LABOR AFRICA Regional Vice President: Makhtar Diop Country Director: Mark R. Lundell Senior Global Practice Director: Michal J. Rutkowski Practice Manager/Manager: Iffath Anwar Sharif Task Team Leader: Laura B. Rawlings, Julia Rachel Ravelosoa, Jumana N. Qamruddin The World Bank Social Safety Net Project (P149323) I. BASIC DATA Product Information Project ID Financing Instrument P149323 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 16-Sep-2015 30-Sep-2020 Organizations Borrower Responsible Agency Ministry of Economy and Planning Republic of ONN/PNNC-SEECALINE,Ministry of Population, Social Madagascar Protection and Promotion of Women,FID Project Development Objective (PDO) Original PDO The project development objective (PDO) is to support the government in increasing the access of extremely poor households to safety net services and in laying the foundations for a social protection system. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-D1450 10-Nov-2016 01-Dec-2016 15-Jan-2017 30-Sep-2020 35.00 26.82 8.12 IDA-57080 16-Sep-2015 13-Nov-2015 10-Feb-2016 30-Sep-2020 40.00 30.88 9.11 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Social Safety Net Project (P149323) II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The Madagascar Social Safety Net Project (P149332) (Cr 5708 MG), amounting to SDR 33,8 million (US$40 million equivalent), was approved by the Board on September 16, 2015 and has been effective since February 10, 2016. This project was designed to support the Government of Madagascar in “increasing the access of extremely poor households to safety net services and in laying the foundations for a social protection system”. There are no outstanding audit reports for Credit 5564-MG / IDA 57080. The Credit 5708 MG will close on September 30, 2020. 1. The project also received an additional financing (AF) (Credit IDA-D1450) in November 2016, for an amount of SDR 25.1 million (US$35 million equivalent) of which SDR10.8 million (US$15 million equivalent) from the national IDA allocation and SDR14.3 million (US$20 million equivalent) was from the IDA Crisis Response Window (CRW)to address the urgent need of the poorest population in the South of Madagascar suffering from severe drought, exacerbated by El Niño. The closing date is the same as above. 2. As of June 21, 2018, the project disbursement ratio is 67% overall (loan 69%, additional financing 65%), with cumulative disbursements of USD 50.59 million. The credit 5708 MG has undisbursed funds of 12.52 US$ million. The project is achieving its main PDO indicators, including beneficiaries covered by social safety nets, reach of the poorest segments of the population, school attendance of children in supported households, and improved nutrition services. Progress towards achievement of Project Development Objective (PDO) and Overall Implementation Progress (IP) are rated Satisfactory. 3. The Project remains highly relevant and aligned with the World Bank’s new Country Partnership Framework (CPF) for FY17-FY21, supporting the CPF objectives 1 and 2 to strengthen children’s human development, and to enhance resilience of livelihoods of vulnerable households in rural and urban areas. The project also supports the National Development Plan (PND) for 2015-2019. 4. The purpose of this level two restructuring is to propose a reallocation of funds between disbursement categories. No components or sub-components are being dropped or substantially revised. Mechanisms for safeguards, institutional arrangements, procurement and financial management will remain the same. 5. The restructuring will ensure continuity and completion of the delivery of cash transfers and livelihood recovery grants within the period of the project which requires additional resources given the better than expected performance to date on the front lines of the program. Components 1 and 2 require additional funding from the first quarter of 2019 to allow the Human Development Cash Transfer and the Productive Safety Net Program to close in August and June 2019, respectively. These needs can be covered by reallocation from the Project Preparation Facility (PPF) and from underutilized funds under component 3. This reallocation of funds focuses support to activities which have proven to be most relevant given the early project experience, and which can be fully implemented under the existing credit and in the remaining project time. An additional financing is under consideration, but would not be approved in time to address the current financial needs of the Social Safety Net cash transfer disbursements. 6. The PDO remains unchanged, and the project indicators are mainly on track. A light revision of the results matrix is needed to better align select targets with activities. This light revision will be taken up as part of the additional financing requested by the Government of Madagascar and is under preparation (P167881) with expected delivery in spring 2019. DESCRIPTION OF PROPOSED CHANGES The World Bank Social Safety Net Project (P149323) A. Rationale for change: 7. The minimal changes proposed changes in this Level Two restructuring are aligned with the findings of the Project midterm review undertaken in June 2018 and the agreements reached with Government of Madagascar counterparts. B. Reallocation of funds by components / disbursement categories 8. There is an increased needs for funds under Component 1 and 2 to continue delivery of the cash transfer program. Those funds will be reallocated from underutilized funds from Component 3 on Institutional Capacity, and from the Project Preparation Facility (PPF) Refinancing disbursement category. This would allow the provision of social safety net services to continue without interruption until the new additional financing becomes effective. The reallocation will not have any adverse effects on completion of activities under the components or achievement of the project development objective. 9. Component 1: Building a Safety Net for the Poor in Selected Rural Areas: Component 1 has advanced well and demonstrated quick disbursement of the Productive Safety Net Program and Human Development Cash Transfer subprograms. Increasing funds to ensure full implementation of targets under subcomponent 1.1 and subcomponent 1.2, and will directly support the poorest household beneficiaries. A reallocation of around 1.9 million US$ equivalent is needed due to a revision of the daily wage rate for the Cash Against Work program in line with the rate of inflation; and funding of additional cash-for-work activities. A reallocation of around 775,000 US$ equivalent is needed to strengthen the cash transfer accompanying measures as recommended by the midterm review, in particular for Early Childhood Development (ECD) support. 11. Component 2: Strengthening Safety Net Administration, Monitoring, and Social Accountability: Funds will be slightly increased (with equivalent US$ 58,000) to cover additional management needs related to the strengthened social safety net activities and cash transfer delivery under Component 1. 12. Component 3: Building the Institutional Capacity for Coordination, Monitoring, and Evaluation of the Social Protection System: Disbursement needs have been slower in this category and this is expected to continue over the next months in light of the upcoming period of elections. Allocation will be decreased (about 1 million US$ equivalent), with the remainder of reallocation covered by available funds under PPF. III. DETAILED CHANGES REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category The World Bank Social Safety Net Project (P149323) Current Proposed IDA-57080- GD,WK,NCS,CS, 001 OC & TR Pt A exc 2,000,000.00 1,426,942.16 2,550,000.00 100.00 100.00 Currency: A 123 XDR Cash 4 WK,Dir cash transf. Pt 18,400,000.00 8,486,690.42 19,762,000.00 100.00 100.00 A123 GD,WK,NCS,CS, 4,400,000.00 1,719,514.07 4,458,000.00 100.00 100.00 OC & TR Pt B GD,WK,NCS,CS, 2,100,000.00 769,299.70 1,391,000.00 100.00 100.00 OC & TR Pt C PPF 1,600,000.00 338,798.52 339,000.00 REFINANCING Total 28,500,000.00 12,741,244.87 28,500,000.00